MCA Newsletter November 2023

The Ministry of Corporate Affairs (MCA) has issued a monthly newspaper for the month of November 2023.

Contribution of ‘Corporate Sector’ in the Indian Economy

The Corporate Sector in India has witnessed a remarkable transformation over the past few decades, playing a pivotal role in the country’s economic growth and development. The corporate sector is also appreciated for being a catalyst for technological advancement and innovation. The dynamism and innovation fostered by corporations have led to the creation of employment, technological advancements, and increased productivity. The Indian corporate sector encompasses a diverse range of industries, including manufacturing, services, technology, and finance, collectively shaping the nation’s economic landscape. The number of active companies in India has increased from 7,18,592 in 2011 to 15,19,782 in 2023. Through investments, employment opportunities, and adherence to global best practices, the corporate sector has become an integral force in propelling India towards sustained economic growth and competitiveness on the global stage.

In a recent International Monetary Fund (IMF) report it was projected that despite a global growth decline i.e., 3.0% in 2023 and 2.9% in 2024, India stands as a beacon of hope. The Reserve Bank of India (RBI) forecasts a robust growth of 7% in the real Gross Domestic Product (GDP) for the FY 2023-24. With real GDP growing by an estimated 7.2% in FY 2022-23, the Indian economy turned out to be one of the fastest-growing major economies of the world, resulting in India’s GDP touching the $3.73 trillion mark in 2023, up from around $2 trillion in 2014. One of the major bright spots in the Indian economy’s fast growth is its Corporate sector which has witnessed a remarkable transformation over the past few decades.

The corporate sector is the strength of character of the Indian economy, so far as it provides a crucial, efficient and planned system for the enlargement of industrial as well as non-industrial sectors of the economy. Private companies account for 95.6% of the total active companies as of November 2023, highlighting the significance of the private sector in the country. Being a tax-buoyant economy, the increase in the number of companies has escalated the tax collections notably. This has been corroborated by the Central Board of Direct Taxes (CBDT) reports, showing substantial growth in gross Corporate Tax collection for FY 2022-23, a 16.91% increase over the previous year, amounting to approx. Rs. 10 lakh crores as per the MoF press release. This notable increase underscores the crucial role played by the Corporate sector in contributing to and shaping the financial landscape. Moreover, the augmented tax collections will further supplement the Government revenue via forward and backward linkages, thus, promoting economic growth. This creates a virtuous cycle of investment, economic activity, and growth in the Corporate sector.

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